US Expat Taxes for Americans Living in Norway – What You Need to Know
There are an estimated 9,000 Americans living in Norway.
There’s a lot to love for Americans about living in Norway, including the skiing, the fjords, and the free, high-quality public services to name just a few. As an American expatriate living in Norway though, what exactly do you need to know regarding filing US expat (and Norwegian) taxes?
All US citizens and green card holders who earn more than $12,550 (in 2021, or just $400 of self-employment income or just $5 if you’re married to a foreigner) anywhere in the world are required to file a US federal tax return and pay taxes to the IRS, regardless of where in the world they live or where their income originates.
The good news is if you are paying income tax in Norway, there are various exclusions and exemptions available to prevent you paying tax on the same income to the IRS too.
US taxes – what you need to know
If you earned more than US$12,550 (in 2021, or $400 of self-employment income etc), you are required to file Form 1040. While taxes are still due by April 15, expats get an automatic filing extension until June 15, which can be extended further online until October 15.
If you have overseas assets worth over US$200,000 per person, excluding your home if it is owned in your own name, you also have to file form 8938 to declare them.
If you had a total of at least US$10,000 in one or more foreign bank and/or investment accounts at any time during the tax year, you also have to file FinCEN form 114, otherwise known as a Foreign Bank Account Report or FBAR.
“According to a recent survey, Norway is the best country in the world for expats who want a healthy work-life balance”
If you pay income tax in Norway, there are several exemptions that allow you to pay less or no US income tax on the same income to the IRS. The main one is the Foreign Earned Income Exclusion, which lets you exclude the first around US$100,000 of foreign earned income from US tax if you can prove that you are a Norwegian resident, and the Foreign Tax Credit, which gives you a $1 tax credit for every dollar of tax you’ve paid in Norway. These exemptions can be combined if necessary.
The US and Norwegian governments share taxpayer info, and Norwegian banks pass on US account holders’ account info to the IRS, so it’s not worth not filing or omitting anything on your return. The penalties for incorrect or incomplete filing for expats are steep to say the least.
If you’re a US citizen, green card holder, or US/Norwegian dual citizen, and you have been living in Norway but you didn’t know you had to file a US tax return, don’t worry: there’s a program called the IRS Streamlined Procedure that allows you to catch up on your filing without paying any penalties. Don’t delay though, in case the IRS comes to you first
Norwegian taxes – what you need to know
Norway has famously high taxes, and famously good public services. It’s a payoff that Norwegians seem happy to live with. If you are a resident in Norway, you’ll have to pay Norwegian income tax. You will also be liable for US taxes on this income though, unless you claim one of the exemptions outlined above.
Norwegian residents’ income is taxed at a flat rate of 22%.
You are considered an Norwegian resident if you spend over 183 days in the country in a tax year, or 270 days over a 36 month period. The Norwegian tax year is the same as in the US. Norwegian tax returns are due by April 30. The Norwegian tax authority is called the Statteetaten.
We strongly recommend that if you have any doubts or questions about your tax situation as a US expat living in Norway that you contact a US expat tax specialist.